Working Poor in Europe – The increase in non-standard forms of employment in many countries appears to have contributed to rising it

The ‘working poor’ are a substantial group, the latest estimate putting 10% of European workers at risk of poverty, up from 8% in 2007. This report describes the development of in-work poverty in the EU since the crisis of 2008, picking up where an earlier Eurofound report on this subject, published in 2010, ended and looks at what countries have done to combat the problem since. This endeavour is complicated by the policy focus on employment as a route out of poverty, underplaying the considerable financial, social and personal difficulties experienced by the working poor. The increase in non-standard forms of employment in many countries appears to have contributed to rising in-work poverty. The report argues the case for greater policy attention and action on the part of governments, employers and social partners, not only through direct measures associated with both the minimum and living wage, progressive taxation, in-work benefits and social assistance, but also and more importantly through indirect measures such as more flexible working arrangements, housing, upgrading of skills and childcare.

Key findings

Although it is difficult to discern clear trends, there is a link between increases in non-standard forms of employment in many countries and the expansion in the proportion of Europeans at risk of in-work poverty.

The working poor face significantly more social problems than the population as a whole: in-work poverty is associated with lower levels of subjective and mental well-being, problems with accommodation, as well as poorer relationships with other people and feelings of social exclusion. This finding demonstrates the importance of paying specific attention to this group and better documenting the social situation of people at risk of in-work poverty.

Most Member States do not specifically address in-work poverty, and the examples in this report show that governments and the social partners have approached the issue through the discussion of poverty more generally, with a particular focus on measures to get people into work. Consequently, the number of policies that are designed explicitly to protect or improve the situation of the working poor is limited.

While an adequate minimum wage is a core pillar of any model of social protection for the working poor, it is clear that policy attention should rather be on minimum household income to reflect more accurately the situation of many of the working poor.
One advantage of measures that indirectly improve the living standards of the working poor is that they help these households without necessarily having them as their main focus. Unfortunately, this can also be a significant disadvantage because the risk exists that these measures fail to reach the working poor. The impact of indirect measures as a tool to prevent in-work poverty needs to be further evaluated.